Tory committee calls for public sector compensation review
The Conservative-controlled House of Commons finance committee is recommending the Harper government establish a royal commission to help conduct a comprehensive examination of the tax system, while also calling for a review of public sector compensation and benefits.
The committee’s recommendation to study public sector salaries and benefits comes the same week Parliamentary Budget Officer Kevin Page released a report estimating the cost of the average federal employee will continue to climb and could hit nearly $130,000 by 2015.
A report tabled this week by the Commons finance committee on pre-budget consultations also recommends: the Conservative government establish an RCMP anti-contraband force to combat illegal tobacco; eliminate inefficient fossil fuel subsidies; and explore expanding the accelerated capital cost allowance to encourage construction of refineries, upgraders and possibly pipelines in Canada.
The report’s 60 recommendations include several on the need for tax reform, including having the federal government examine further ways to combat tax evasion and conduct a comprehensive review of the tax system to help ensure its fairness and neutrality, and to close loopholes that allow certain groups to avoid paying their “fair share of tax.”
Moreover, the committee is recommending the government establish a royal commission to complete a major review of the federal Income Tax Act.
Conservative MP and committee chairman James Rajotte said a number of chambers of commerce, small business groups and tax watchdogs have complained about the tax system, and the need to streamline and modernize it.
Improving the tax system could spur competitiveness, productivity and create jobs, while also helping determine which tax credits are useful and those that are no longer needed, he said.
“They want an overall review of the entire system and to include discussion on everything,” Rajotte said of what the committee heard from various groups.
“They argued, I think, convincingly that we need a group to really take a long hard look at the overall (tax) act itself and recommend some changes.”
Rajotte said he has spoken with Finance Minister Jim Flaherty about a royal commission on the tax system, and that the minister is open to examining the idea.
“I’ve certainly talked to the minister about it and others in Finance (Department) about it, and there has been an openness to discuss it,” he said.
Flaherty’s spokesperson said Thursday the minister appreciates the finance’s committee’s work on prebudget consultations and is examining all of the suggestions as the government prepares the 2013 fiscal plan.
“We are currently closely reviewing the report and its many recommendations,” Kathleen Perchaluk, Flaherty’s press secretary, said in an e-mail.
The Conservatives have already moved to reform public sector retirement plans, including having federal workers increase their pension contributions to 50 per cent (from 37 per cent today).
The finance committee is now recommending the government review public sector salaries and benefits to ensure they are financially sustainable and to “align them more closely and make them more competitive with other public- and privatesector employers.”
In its report from earlier this week, the Office of the Parliamentary Budget Officer estimated the average public servant costs taxpayers approximately $114,000 a year, including pensions and benefits. The public service now employs about 375,500 people, with government spending $43 billion annually on pay, pension and benefits to federal employees.